Articles Posted in California Courts of Appeal

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This appeal presented an issue regarding the effect of Labor Code section 218.5 on a prevailing party employer’s right to recover contract-based attorney fees from an employee. In this case, Dane-Elec Corporation USA (Dane Corp.) prevailed against Nessim Bodokh, its former chief executive officer, on a complaint to recover on a promissory note and defeated Bodokh’s cross-complaint to recover allegedly unpaid wages. The trial court granted Dane Corp.’s motion to recover attorney fees based on an attorney fees provision in the promissory note. The court found that Bodokh had not brought the wage claim in bad faith and declined to award Dane Corp. attorney fees incurred solely in connection with the wage claim. But the court awarded Dane Corp. attorney fees incurred in defending Bodokh’s wage claim that were inextricably intertwined with the contract claim. Bodokh appealed from the judgment and the order granting Dane Corp.’s motion for attorney fees. The Court of Appeal reversed the order granting Dane Corp.’s motion for attorney fees and remanded. Based on its holding, the Court concluded that under section 218.5(a) Dane Corp. could not recover attorney fees to the extent the wage claim and the breach of contract claim were inextricably intertwined. The matter was remanded for the trial court to recalculate the amount of attorney fees to be awarded to Dane Corp. View "Dane-Elec Corp. v. Bodokh" on Justia Law

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Plaintiff Dr. Robert Paxton reviewed claims for disability benefits for the Department of Social Services, where he worked. This dispute arose after the California Public Employees’ Retirement System (CalPERS) determined that compensation Paxton received as part of a bonus program would not be considered when calculating his future pension benefit. He appealed a judgment denying his petition for writ of administrative mandamus challenging a decision by the Board of Administration of CalPERS upholding this interpretation. The trial court’s conclusion that the bonuses Paxton earned were for performing additional services outside his regular duties, and thus not appropriate for consideration when calculating his pension benefit, was supported by substantial evidence. Finding no reversible error, the Court of Appeal affirmed. View "Paxton v. Bd. of Admin., CalPERS" on Justia Law

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Plaintiff-appellant Patrick Barber's second appeal in this case raised an issue of first impression for the Court of Appeal's review. Upon remand from Barber’s first appeal (Barber I), defendant-respondent, the California State Personnel Board (SPB), awarded Barber a lump sum back pay award, which resulted in Barber incurring increased income tax liability. SPB denied Barber’s motion for recovery for increased tax liability. The trial court upheld SPB’s decision and denied Barber’s petition for writ of mandamus. Barber appealed the denial of his writ petition and motion for increased tax liability recovery, contending he was entitled to recover damages for incurring increased tax liability because his increased tax liability was caused by real party in interest and respondent, California Department of Corrections and Rehabilitation (CDCR) improperly terminating his employment. Barber argued awarding him such relief was consistent with the remedial statutory purpose of Government Code section 19584,2 of making an improperly terminated employee whole by restoring the employee to the financial position he or she would otherwise have occupied had employment not been wrongfully interrupted. The Court of Appeal disagreed, finding Barber was not entitled to increased tax liability recovery under section 19584 or to such recovery as equitable relief, because such relief was not statutorily authorized. View "Barber v. CA State Personnel Bd." on Justia Law

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The Los Angeles County Civil Service Commission's special and limited jurisdiction does not extend to matters not delegated to it by the Charter of the County of Los Angeles. Real party in interest, who worked for the County for 30 years, challenged the trial court's judgment reversing the Commission's order entitling her to a medical reevaluation under Civil Service Rule 9.07B. The Court of Appeal held that the Commission lacked jurisdiction over real party's appeal where there is no Charter provision or rule permitting the Commission to hear appeals related to Rule 9.07. In the interests of justice and because the purely legal issue may arise again, the court held that an employee is not entitled by law to a medical reevaluation under Rule 9.07B. Accordingly, the court vacated the judgment and remanded. View "County of Los Angeles Department of Public Social Services v. Civil Service Commission of Los Angeles County" on Justia Law

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The Court of Appeal affirmed the trial court's dismissal of plaintiff's Second Amended Complaint (SAC) against the school district and six of its employees, alleging a pattern of harassment, discrimination and retaliation against her because she engaged in protected activities. The court held that the demurrer to the cause of action entitled, "Retaliation in Violation of Government Code Section 12940(h)" was properly sustained; the trial court did not abuse its discretion in denying leave to add or amend the cause of action alleged for the first time in the SAC; failure to comply with the Government Claims Act bars the cause of action alleging violations of Labor Code section 1102.5; and the trial court did not abuse its discretion when it denied leave to amend despite plaintiff's PTSD. View "Le Mere v. Los Angeles Unified School District" on Justia Law

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Defendant Roy Miller Freight Lines, LLC (RMFL) appealed a trial court order granting in part and denying in part its motion to compel its former employee, plaintiff William Muller (Muller), to arbitrate his wage and hour claims under the arbitration provision in his employment agreement. The trial court granted RMFL’s motion on all but one cause of action: Muller’s claim for unpaid wages, and stayed the prosecution of that remaining claim pending the completion of the arbitration. The issue this case presented for the Court of Appeal's review centered on whether the Federal Arbitration Act (FAA) applied, and more specifically, whether Muller was a transportation worker engaged in interstate commerce under 9 U.S.C. 1 (section 1) and thus exempt from FAA coverage. If he was exempt from FAA coverage, as the trial court held, Muller did not have to arbitrate his cause of action for unpaid wages because Labor Code section 229 (section 229) authorized lawsuits for unpaid wages notwithstanding an agreement to arbitrate. If the FAA applied, as RMFL contended, the FAA preempted section 229, and Muller had to submit his cause of action for unpaid wages to arbitration, along with his five other causes of action. The Court found the trial court correctly concluded Muller was exempt from FAA coverage under section 1. Even though Muller did not physically transport goods across state lines, his employer was in the transportation industry, and the vast majority of the goods he transported originated outside California. Thus, section 229 required staying the prosecution of his cause of action for unpaid wages while the other five causes of action proceed to arbitration. View "Muller v. Roy Miller Freight Lines, LLC" on Justia Law

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Goldstein worked until March 2013. The Employment Development Department (EDD) granted him unemployment insurance benefits, which he received in March 2013 through August 10, 2013. In August 2013, he successfully applied for disability benefits, which he received until he exhausted his maximum benefit amount in September 2014. Goldstein filed another unemployment claim, which had an effective date of March 23, 2014. EDD determined that Goldstein’s second claim was invalid under Unemployment Insurance Code section 1277 because during the benefit year of his first claim he neither was paid sufficient wages nor performed any work. An ALJ and the Appeals Board agreed while acknowledging that disability benefits qualify as wages under section 1277.5. The court of appeal affirmed, finding that the Board erred, but the error was not prejudicial. A claimant can establish a valid claim under section 1277(a) even if he received unemployment insurance benefits during the benefit year of the prior valid claim if both the earnings and work requirements are satisfied. Goldstein satisfied the earnings requirement and the Board erred in ruling otherwise but there is no evidence Goldstein performed services for pay during that time. View "Goldstein v. California Unemployment Insurance Appeals Board" on Justia Law

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When De Melo was hired, he signed SCI’s “Owner/Operator Agreement,” five pages long, typed in small font, with 27 clauses. The arbitration clause provides that if the parties are unable to settle a dispute, disputes “within the jurisdictional maximum for small claims will be settled in the small claims court.” All other disputes shall be settled by arbitration in accordance with the Federal Arbitration Act. The clause prohibits consolidating claims in arbitration or arbitrating any claim as a representative member of a class or in a private attorney general capacity. All parties may examine up to three witnesses per party. Each deposition is limited to two hours. Any objections based on privilege and/or confidential information are reserved for arbitration. The arbitrators have authority to award actual monetary damages only. No punitive or equitable relief is authorized. All parties bear their own costs; no attorney’s fees or other costs may be granted. "The arbitrator’s decision shall be final and legally binding and judgment may be entered thereon.” De Melo’s native language is Portuguese; he cannot fully understand documents written in English. No one asked if he wanted the documents translated nor explained the documents. He was not given time to carefully review the documents; no one told him he could have an attorney review them. De Melo filed a claim with the Labor Commissioner, seeking unpaid overtime, meal, and rest period wages, reimbursement of unlawful wage deductions and business expenses, and statutory penalties. (Lab. Code, 203, 226, 2802.) . The court of appeal affirmed the denial of a petition to compel arbitration, finding that the arbitration clause was procedurally and substantively unconscionable and that severance of the substantively unconscionable provisions was not possible because the clause was permeated with unconscionability. View "Subcontracting Concepts (CT), LLC v. De Melo" on Justia Law

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Savea has been a YRC employee since 1998. YRC employees received wage statements that listed the employer name as YRC Freight and the employer address as 10990 Roe Avenue, Overland Park, KS 66211. In 2016, Savea filed an online notice with the California Labor and Workforce Development Agency alleging YRC’s wage statements violated Labor Code 226(a)(8). In 2017, Savea sued, alleging YRC’s wage statements “do not accurately show the name of the legal entity that is the employer” and “fail to completely and accurately show the employer’s address,” because the entity registered with the California Secretary of State was YRC Inc. and “its complete address” included a mail stop code and a ZIP+4 Code: “10990 Roe Ave. MS A515, Overland Park, KS 66211-1213.” YRC explained that YRC Freight is the registered fictitious business name that YRC uses in California and that the listed address is YRC’s correct mailing address and that its wage statements comply with the template provided by the California Division of Labor Standards Enforcement (DLSE). The court of appeal affirmed judgment in favor of YRC. The trial court did not err in considering DLSE templates or Sacramento County documents concerning the renewal of YRC’s fictitious name registration. View "Savea v. YRC Inc." on Justia Law

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The Court of Appeal reversed the trial court's denial of Sohnen's motion to compel arbitration of workplace discrimination claims brought by plaintiff, an employee of Sohnen. The court held that the record demonstrated consent to arbitration where plaintiff's continued employment was a manifestation of agreement to the arbitration provisions. The court also held that plaintiff failed to demonstrate that the arbitration agreement was unenforceable where the record contained no evidence of surprise, nor of sharp practices demonstrating substantive unconscionability. Accordingly, the court remanded for further proceedings. View "Diaz v. Sohnen Enterprises" on Justia Law